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Case ECS-12/14: Kosovo* / free movement of goods

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summary of the case

registered:

ex officio 2014

One of the main objectives of the Energy Community Treaty is the creation of an energy market without internal frontiers. In order for that to be achieved, network energy must be able to move freely without the payment of fees established only for the reason that they cross a frontier between two Parties. Article 41 of the Treaty prohibits all customs duties, as well as all measures having equivalent effect to customs duties, on the export of network energy. Following Article 1 of Decision 2008/03/MC on the inclusion of the oil sector in the term "network energy", this prohibition also applies to crude oil and petroleum products.

The legislation and practice of Kosovo* to levy customs duties on imports of certain petroleum products from EU Member States are covered by this provision of the Treaty.

Consequently, the Secretariat has concluded that Kosovo* violated Article 41 of the Treaty by levying customs duties on imports of certain petroleum products from EU Member States.

Following the adoption of Governmental Decision and the Administrative Instructions in September 2016, and abolishing customs duties levied on imports of petroleum products in Kosovo*, the Secretariat decided to close Case ECS-12/14 on 17 October 2016.

Case ECS 12/14 information requests

procedural history

On 18 July 2014, the Energy Community Secretariat sent an Opening Letter to Kosovo* in accordance with Article 12 of the Rules of Procedure for Dispute Settlement. In the Opening Letter, the Secretariat takes the preliminary view that Kosovo* failed to fulfill its obligations under the Energy Community Treaty by levying customs duties on imports of certain petroleum products from EU Member States to Kosovo*.

Procedure

According to Articles 6 and 16 of the Rules of Procedure for Dispute Settlement, interested parties may be granted access to the case file and may submit written observations on the present case to the Secretariat within one month from 18 July 2014.

Having taken into account the Government’s reply to the Opening Letter, the Secretariat maintains its findings made therein. In the Reasoned Opinion, it reiterates its view that by levying customs duties on imports of certain petroleum products from Parties to the Treaty Kosovo* violates Article 41 of the Treaty.

Reasoning

In its reply to the Opening Letter, Kosovo* did not dispel the Secretariat’s compliance concerns raised by the Opening Letter, and it confirmed the existence of customs duties on oil and petroleum products. Therefore, the Secretariat maintains that by levying customs duties on imports of certain petroleum products, Kosovo* infringes Article 41 of the Treaty which prohibits all customs duties on import of Network Energy.

Procedure

A Reasoned Opinion is the second step in a dispute settlement procedure initiated by the Secretariat under Article 90 of the Energy Community Treaty. Depending on the Government's reply, the Secretariat may submit the case to the Ministerial Council for a decision on Kosovo*’s compliance with Energy Community law.

Kosovo* is now requested to rectify the identified issues of non-compliance within a time limit of two months.

Following the adoption of Governmental Decision and the Administrative Instructions in September 2016, and abolishing customs duties levied on imports of petroleum products in Kosovo*, the Secretariat decided to close Case ECS-12/14. Since no customs duties are levied anymore on import of petroleum products from EU Member States or Contracting Parties to Kosovo*, Kosovo* rectified the breaches identified in the Reasoned Opinion.

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